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On the Heels of Amazon, IBM to Enter China

December 20, 2013
by Staff Writer

On the heels of Amazon's announcement yesterday that it had signed MOUs with local governments that will see the company develop cloud computing services in mainland China, IBM has immediately announced its intention to offer the extension of services in the country. IBM will work with partner 21Vianet Group to expand its SmartCloudEnterprise+ cloud platform into China and offer managed private cloud services.

The fact that IBM has so swiftly followed Amazon in China is of no surprise to some cloud watchers. The two companies have been competing with each other for a CIA contract (which Amazon won) and some analysts suggest that this led to a very focused rivalry. IBM's purchase of SoftLayer led many to believe the company would transfer its cloud brands over to its acquisition, so its push in China might therefore mean the company is implementing solutions it might not be managing in the very near future. Potentially, this could be an indication that the company's plans are a reaction to Amazon's current activity in China.

Aside from IBM-Amazon rivalry, the expansion of the two major cloud players into China, with press releases circulated within 24 hours of each other, coupled with this year's OpenStack summit being held in Hong Kong, could be an indication of a change in global policy as far as key cloud players are concerned.

Seen against a backdrop of moderate update of cloud-based IaaS services in Europe and the United States, and ongoing price wars driving down prices, the current focus on China is a clear indication that cloud companies are eying additional markets as a means of gaining more customers, rather than intensifying efforts in their traditional markets.

What's your response to this shift in emphasis to China? Too much too soon? Let us know your views. Add your comments below.

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